Labour's plans for a huge expansion of religious schools were condemned yesterday by the National Secular Society as grossly discriminatory and an "explosive" threat to community relations.

In a response to the green paper on Labour's plans for education reform, published in February and since used in the election manifesto, the NSS said it was scandalous that education resources - paid for by all taxpayers - were being channelled into schools that gave privileged access to people of a particular faith.

In the green paper, Labour outlined plans to set up more schools supported by the churches and minor faiths. Since the 1997 election, Muslim, Sikh and Greek Orthodox schools have been brought into the state system for the first time, and given voluntary-aided status and government funding already enjoyed by Anglican and Catholic schools.

But the NSS questioned in its submission why Labour had made the plans at a time church attendance was at its lowest in Britain. Keith Porteous Wood, executive director of the NSS, said: "We are shocked that the government intends to extend further the unfair privileges that religious schools already enjoy.

"It is surely against the spirit, if not the letter, of our human rights legislation to allow public money, raised from us all, to be used to provide education to which non-believers can be denied access on grounds of their non-belief."

The NSS said religious schools were divisive, separating children on religious and racial grounds.

Mr Porteous Wood said: "With such a large number of minority faiths in this country there will be calls for more religious schools to cater for them. Some children from minority faiths will live in a ghetto and be educated in a ghetto. How is this supposed to foster good community relations?"

He said the "ethos" of religious schools, much-admired by Labour for leading to better discipline and higher standards, was achieved not through any religious character but from the schools' ability to screen out children likely to cause trouble. Also, parents were reduced to "feigning belief to get their children into these schools".

A spokesman for Labour said its expansion of religious schools was based on the need for equal opportunity, which had been denied by the previous government: "It was indefensible for the Tories to refuse to support Muslim and other schools. We must offer other faiths the same rights to a state education which have been enjoyed by Anglicans and Catholics for decades."